There are many challenges and hurdles in starting a new business venture. Launching a business brings both great risk and great excitement. Most ideas, though, never make it off of the ground, and of those that do, the vast majority end in failure. Of the many hurdles to starting a business, there are four that universally stall ventures even when they have a promising business model.

Biggest hurdles for a startup:

Cash/Funding: You aren’t an entrepreneur unless you are willing to take risks with your own money, although that risk is calculated because you believe in what you are doing. Still, additional funds are usually needed. Most companies can’t grow to scale without some type of loan or capital infusion.

Facility: Certain startups require retail, manufacturing, or warehouse space. Some just need an office. Either way, only certain types of companies can launch from their home, so a facility is needed, and signing a lease that cost more than your mortgage is a daunting step.

Know-how: An entrepreneur seldom is an expert on all facets of what will be required to start and grow a business. Typically certain areas like operations, sales, and accounting will need outside expertise. A startup needs to be able to quickly pull in expert advice to solve these issues so it can promote its idea and win initial customers.

Hiring: Adding the very first employee is a huge step. The paperwork, taxes, and regulations increase exponentially for that very first employee. There are also much higher risks from a legal perspective, and payroll drains company cash quickly during the early phases of a company.

Goal: Government at the Federal, State, and Local levels all seek to encourage entrepreneurship because small businesses are the job creating engine. Programs that seek to encourage business startups can be most effective by focusing on assistance to the business owner to launch and then help that startup company to hire their first employee.

5 Ways to Help Cultivate Business Startups: The following ideas are used by public and private groups, and have the ability to make a key difference in the business startup phase.

  1. Rent credit: Startup companies get a rent credit of a couple dollars per square foot for a period of a 1-3 years. This could also be applied at a flat amount to offset the cost of a business starting in an incubator. Rent credits are particularly useful for municipalities that are trying to develop a brand for being business friendly, and they can facilitate a very wide range of business startups.
  2. Training: Incentives that help to pay for training events, not just to hear a business pitch but real, quality information. Funds can help cover the cost of a trainer and the event coordination/hosting.
  3. Micro-Loans: More and more public and private groups seeking to foster small business development, realize that even a small loan of a few thousand dollars can make the difference to help a business launch. Grove City, Ohio has a similar program called the Town Center Loan Program, but with its very strict underwriting requirements, it is really only applicable to businesses that have real estate collateral. Micro-Loans need to have friendly underwriting guidelines.
  4. ASO Fees: Typically the most important entrepreneurship goal for government is to see jobs created, yet the rules and regulations created by the government make this one of the most difficult steps for a new business. One way governments could help is by paying the $1000-$2000 annual fee to have an Administrative Services Organization take on all the HR tasks for benefits and payroll for the first few new employees.
  5. High speed internet: Forward thinking communities like Dublin, Ohio have created their own entrepreneur center. Communities like Dublin are also strategically situated with high speed fiber connectivity to the web. In fact, the DEC in Dublin has a double advantage because their entrepreneur center is located in an actual data center. Most communities do not have the benefits of being in proximity to a data center and thus are not as attractive to technology startups that need high speed access to their servers in a data center environment. With technology, though, there is a solution that can level the playing field for communities that are distant from a data center. For about $2,000 a month, a city such as Grove City could place a 500mb direct fiber connection to the leading data center in Columbus. This connection would also provide high speed internet access at this same speed. This point-to-point connection would make it possible for a technology-dependant startup to have nearly the same access to their servers from the data center as they would have if they were in an adjacent office.